“I have only one question,” Bewkes continued. “If you sell a subscription to my magazine, and I give you the 30%, who has the subscription—you or me?”
“I can’t give away all the subscriber info because of Apple’s privacy policy,” Jobs replied.
“Well, then, we have to figure something else out,
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because I don’t want my whole subscription base to become subscribers of yours, for you to then aggregate at the Apple store,” said Bewkes. “And the next thing you’ll do, once you have a monopoly, is come back and tell me that my magazine shouldn’t be $4 a copy but instead should be $1. If someone subscribes to our magazine, we need to know who it is, we need to be able to create online communities of those people, and we need the right to pitch them directly about renewing.”
Jobs had an easier time with Rupert Murdoch, whose News Corp. owned the Wall Street Journal, New York Post, newspapers around the world, Fox Studios, and the Fox News Channel. When Jobs met with Murdoch and his team, they also pressed the case that they should share ownership of the subscribers that came in through the App Store. But when Jobs refused, something interesting happened. Murdoch is not known as a pushover, but he knew that he did not have the leverage on this issue, so he accepted Jobs’s terms.
“We would prefer to own the subscribers, and we pushed for that,” recalled Murdoch. “But Steve wouldn’t do a deal on those terms, so I said, ‘Okay, let’s get on with it.’ We didn’t see any reason to mess around. He wasn’t going to bend—and I wouldn’t have bent if I were in his position—so I just said yes.”
Murdoch even launched a digital-only daily newspaper, The Daily, tailored specifically for the iPad.
It would be sold in the App Store, on the terms dictated by Jobs, at 99 cents a week. Murdoch himself took a team to Cupertino to show the proposed design. Not surprisingly, Jobs hated it. “Would you allow our designers to help?” he asked. Murdoch accepted. “The Apple designers had a crack at it,” Murdoch recalled,
“and our folks went back and had another crack, and ten days later we went back and showed them both,
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and he actually liked our team’s version better. It stunned us.”
The Daily, which was neither tabloidy nor serious, but instead a rather midmarket product like USA Today, was not very successful. But it did help create an odd-couple bonding between Jobs and Murdoch. When Murdoch asked him to speak at his June 2010 News Corp. annual management retreat, Jobs made an exception to his rule of never doing such appearances.
James Murdoch led him in an after-dinner interview that lasted almost two hours. “He was very blunt and critical of what newspapers were doing in technology,”
Murdoch recalled. “He told us we were going to find it hard to get things right, because you’re in New York, and anyone who’s any good at tech works in Silicon Valley.” This did not go down very well with the president of the Wall Street Journal Digital Network, Gordon McLeod, who pushed back a bit. At the end, McLeod came up to Jobs and said, “Thanks, it was a wonderful evening, but you probably just cost me my job.” Murdoch chuckled a bit when he described the scene to me. “It ended up being true,” he said. McLeod was out within three months.
In return for speaking at the retreat, Jobs got Murdoch to hear him out on Fox News, which he believed was destructive, harmful to the nation, and a blot on Murdoch’s reputation. “You’re blowing it with Fox News,” Jobs told him over dinner. “The axis today is not liberal and conservative, the axis is constructive-destructive, and you’ve cast your lot with the destructive people. Fox has become an incredibly destructive force in our society. You can be better, and this is going to be your legacy if you’re not careful.” Jobs said he thought Murdoch did not really like how far Fox had gone.
“Rupert’s a builder, not a tearer-downer,” he said. “I’ve had some meetings with James, and I think he agrees
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with me. I can just tell.”
Murdoch later said he was used to people like Jobs complaining about Fox. “He’s got sort of a left-wing view on this,” he said. Jobs asked him to have his folks make a reel of a week of Sean Hannity and Glenn Beck shows—he thought that they were more destructive than Bill O’Reilly—and Murdoch agreed to do so. Jobs later told me that he was going to ask Jon Stewart’s team to put together a similar reel for Murdoch to watch. “I’d be happy to see it,” Murdoch said, “but he hasn’t sent it to me.”
Murdoch and Jobs hit it off well enough that Murdoch went to his Palo Alto house for dinner twice more during the next year. Jobs joked that he had to hide the dinner knives on such occasions, because he was afraid that his liberal wife was going to eviscerate Murdoch when he walked in. For his part, Murdoch was reported to have uttered a great line about the organic vegan dishes typically served: “Eating dinner at Steve’s is a great experience, as long as you get out before the local restaurants close.” Alas, when I asked Murdoch if he had ever said that, he didn’t recall it.
One visit came early in 2011. Murdoch was due to pass through Palo Alto on February 24, and he texted Jobs to tell him so. He didn’t know it was Jobs’s fifty-sixth birthday, and Jobs didn’t mention it when he texted back inviting him to dinner. “It was my way of making sure Laurene didn’t veto the plan,” Jobs joked.
“It was my birthday, so she had to let me have Rupert over.” Erin and Eve were there, and Reed jogged over from Stanford near the end of the dinner. Jobs showed off the designs for his planned boat, which Murdoch thought looked beautiful on the inside but “a bit plain”
on the outside. “It certainly shows great optimism about his health that he was talking so much about building it,” Murdoch later said.
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At dinner they talked about the importance of infusing an entrepreneurial and nimble culture into a company. Sony failed to do that, Murdoch said. Jobs agreed. “I used to believe that a really big company couldn’t have a clear corporate culture,” Jobs said. “But I now believe it can be done. Murdoch’s done it. I think I’ve done it at Apple.”
Most of the dinner conversation was about education. Murdoch had just hired Joel Klein, the former chancellor of the New York City Department of Education, to start a digital curriculum division. Murdoch recalled that Jobs was somewhat dismissive of the idea that technology could transform education. But Jobs agreed with Murdoch that the paper textbook business would be blown away by digital learning materials.
In fact Jobs had his sights set on textbooks as the next business he wanted to transform. He believed it was an $8 billion a year industry ripe for digital destruction. He was also struck by the fact that many schools, for security reasons, don’t have lockers, so kids have to lug a heavy backpack around. “The iPad would solve that,” he said. His idea was to hire great textbook writers to create digital versions, and make them a feature of the iPad. In addition, he held meetings with the major publishers, such as Pearson Education, about partnering with Apple. “The process by which states certify textbooks is corrupt,” he said. “But if we can make the textbooks free, and they come with the iPad, then they don’t have to be certified. The crappy economy at the state level will last for a decade, and we can give them an opportunity to circumvent that whole process and save money.”
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CHAPTER THIRTY-NINE
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NEW BATTLES
And Echoes of Old Ones
Google: Open versus Closed
A few days after he unveiled the iPad in January 2010, Jobs held a “town hall” meeting with employees at Apple’s campus. Instead of exulting about their transformative new product, however, he went into a rant against Google for producing the rival Android operating system. Jobs was furious that Google had decided to compete with Apple in the phone business.
“We did not enter the search business,” he said. “They entered the phone business. Make no mistake. They want to kill the iPhone. We won’t let them.” A few minutes later, after the meeting moved on to another topic, Jobs returned to his tirade to attack Google’s famous values slogan. “I want to go back to that other question first and say one more thing. This ‘Don’t be evil’ mantra, it’s bullshit.”
Jobs felt personally betrayed. Google’s CEO Eric Schmidt had been on the Apple board during the development of the iPhone and iPad, and Google’s founders, Larry Page and Sergey Brin, had treated him as a mentor. He felt ripped off. Android’s touchscreen interface was adopting more and more of the features—
multi-touch, swiping, a grid of app icons—that Apple had created.
Jobs had tried to dissuade Google from developing Android. He had gone to Google’s headquarters near Palo Alto in 2008 and gotten into a shouting match with Page, Brin, and the head of the Android development team, Andy Rubin. (Because Schmidt was then on the Apple board, he recused himself from discussions involving the iPhone.) “I said
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